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Genexion, Inc. v. Rhode Island Department of Labor and Training

Superior Court of Rhode Island

September 3, 2014

GENEXION, INC.
v.
RHODE ISLAND DEPARTMENT OF LABOR AND TRAINING, DIVISION OF LABOR STANDARDS and CAROL A. LEWIS-CULLINAN

Providence County Superior Court

For Plaintiff: Daniel T. Angelone, Esq. Patricia E. Andrews, Esq.

For Defendant: Mary Ellen McQueeney-Lally, Esq. Michael L. Mineau, Esq.

DECISION

McGUIRL, J.

Before the Court is an appeal from a decision of the Rhode Island Department of Labor and Training (DLT) finding that Carol A. Lewis-Cullinan (Ms. Lewis-Cullinan) is entitled to $14, 637.89 in unpaid vacation wages. Genexion, Inc. (Appellant), Ms. Lewis-Cullinan's former employer, asks this Court to either reverse DLT's decision or remand the matter for a new hearing. Jurisdiction of this appeal is pursuant to G.L. 1956 § 42-35-15.

I

Facts and Travel

Ms. Lewis-Cullinan worked for Appellant as Senior Executive Director of North America Operations from October 1, 2006 until October 9, 2009. (DLT Hr'g Tr. (Tr.) 8, 12, Jan. 13, 2011; Pet'r's Ex. 1.) At the time she commenced working for Appellant, Ms. Lewis-Cullinan signed an Employment Agreement. (Tr. at 9; Pet'r's Ex. 2.) The Employment Agreement provided, inter alia, that she was entitled to five weeks of vacation time per year and could carry over a maximum of four weeks of that vacation time from year to year. (Pet'r's Ex. 2, § 4.3.) The Employment Agreement also provided that any accrued vacation time would be paid in a lump sum within thirty days after the date of termination. (Pet'r's Ex. 2, § 6.1.) After Ms. Lewis-Cullinan terminated her employment with Appellant, she requested a payout of the 225.06 hours of vacation time that she had accrued. (Tr. at 20-24; Pet'r's Exs. 4A, 5, 6.) Appellant made one payment to Ms. Lewis-Cullinan in the amount of $5000 and requested that she accept periodic installments instead of one lump sum. (Tr. at 20-22; Pet'r's Exs. 4B, 5.)

On November 30, 2009, Ms. Lewis-Cullinan filed a Complaint Form for the NonPayment of Wages (Complaint Form) with the Division of Labor Standards at the DLT. (Pet'r's Ex. 1.) On her Complaint Form, Ms. Lewis-Cullinan claimed that, pursuant to her Employment Agreement, she was owed $14, 637.89 in outstanding accrued vacation time pay. Id. A hearing officer of the DLT held a hearing on January 13, 2011. (Decision at 1.) The hearing officer heard testimony from Ms. Lewis-Cullinan and Dr. Yves Grumser, the CEO of Genexion, S.A. and President of Appellant.

Ms. Lewis-Cullinan testified about the length and nature of her employment with Appellant. She began working for Appellant on October 1, 2006 and her last day was October 9, 2009. (Tr. at 11-12; Pet'r's Ex. 3.) The terms of her employment, including scheduled salary increases and vacation time, were articulated in an Employment Agreement (submitted as Pet'r's Ex. 2). (Tr. at 9-11.) She testified that, upon termination of her employment with Appellant, she inquired about a payout of her accrued vacation time pursuant to Section 6.1 of the Employment Agreement. (Tr. at 19-20.). Ms. Lewis-Cullinan testified that she received an email from a Senior Executive Director from Genexion, S.A. (Appellant's parent company) on November 12, 2009 (submitted as Pet'r's Ex. 5), offering to pay the accrued vacation time in $5000 monthly installments. (Tr. at 20-22.) She also testified that she filed the Complaint Form (submitted as Pet'r's Ex. 1) with DLT after Appellant ceased responding to her inquiries. (Tr. at 20.) Ms. Lewis-Cullinan also sent an email to Appellant's representatives on December 5, 2009, advising them that she had filed the Complaint Form with DLT because Appellant was not in compliance with G.L. 1956 § 28-14-4.[1] (Tr. at 24; Pet'r's Ex. 6.) Ms. Lewis-Cullinan also submitted copies of her last two paystubs from Appellant. (Tr. at 18.) Petitioner's Exhibit 4A, dated October 15, 2009, reflects a Paid Time Off (PTO) balance of 225.06 hours. Petitioner's Exhibit 4B, dated October 30, 2009, reflects a PTO payment of $5000. This latter paystub also reflects that the PTO balance is still 225.06 hours, but Ms. Lewis-Cullinan testified that this balance was in error due to the $5000 payout reflected on this paystub. (Tr. at 27.) The narrative in Ms. Lewis-Cullinan's Complaint Form specifies that she received $5000 as of November 16, 2009 and was still owed 167.76 hours of accrued vacation time, payable at her hourly rate of $87.26, for a total amount owed of $14, 637.89. (Tr. at 26-28; Pet'r's Ex. 1.)

Dr. Grumser both represented Appellant at the hearing and testified on its behalf. Dr. Grumser testified that he hired Ms. Lewis-Cullinan to start the North American office of Genexion, S.A. and that Appellant's operations were initially run from Ms. Lewis-Cullinan's basement. (Tr. at 31.) Dr. Grumser testified that he spent most of his time at Appellant's parent company's headquarters in Geneva, Switzerland, and only seven to ten days per year in the U.S.A. (Tr. at 31-32.) Providence, Rhode Island is Genexion, S.A.'s only office in the U.S.A. (Tr. at 32.) Dr. Grumser testified that, as a start-up company, Appellant experienced some financial difficulty in its first years, and there was much discussion about the finances of the company at the beginning of 2009. (Tr. at 34-35.)

Dr. Grumser testified that he prepared a report regarding payroll records after Ms. Lewis-Cullinan resigned (submitted as Resp't's Ex. 1), which he claimed reflected that she owed Appellant money because she granted herself pay increases that he did not directly approve. (Tr. at 37.) Dr. Grumser also submitted payroll records from November 2006 through October 2009 (Resp't's Ex. 2) in support of his developing argument that Ms. Lewis-Cullinan was overpaid, but the hearing officer made clear that the only issue before him was Ms. Lewis-Cullinan's claim for vacation wages. (Tr. at 41.) The hearing officer stated that he could not make any rulings regarding her salary and that this issue belonged in a different forum. Id. Dr. Grumser further testified that he did not receive any timesheets or time reports from Ms. Lewis-Cullinan in the last year and one-half of her employment. (Tr. at 43; Resp't's Ex. 3.) Dr. Grumser submitted timesheets (Resp't's Ex. 3) and an Employee Handbook written for Appellant by Ms. Lewis-Cullinan (Resp't's Ex. 4) as an offer of proof that Ms. Lewis-Cullinan was either not entitled to a payout of the number of vacation hours claimed or not entitled to a payout until she had returned some of Appellant's property.[2] (Tr. at 44-48.)

During cross-examination from Ms. Lewis-Cullinan's attorney, Dr. Grumser admitted that he countersigned Ms. Lewis-Cullinan's Employment Agreement and that the Employment Agreement provided that she was entitled to annual pay increases and five weeks of vacation time per year. (Tr. at 55-57.) Dr. Grumser also admitted that he was not familiar with the timesheet and payroll management system utilized by Appellant because he was "working in an environment of trust, . . . trusting that Carol will run the operations, uh, in the right way, and will report her time correctly." (Tr. at 52.) Dr. Grumser testified that he disputed the number of vacation hours claimed by Ms. Lewis-Cullinan for a "series of reasons, " including her failure to return some of Appellant's property and her failure to properly report her time. (Tr. at 58-59.)

In response to questions from the hearing officer after Dr. Grumser completed his testimony, Ms. Lewis-Cullinan testified that, pursuant to her Employment Agreement, she had carried over four weeks of accrued vacation time from 2008 to 2009 and then was entitled to five weeks of vacation time in 2009. (Tr. at 66-69.) She testified that Dr. Grumser never requested, received, or signed a time sheet that she had completed. (Tr. at 71.) If she did not complete the weekly timesheet, she testified that another employee would record her hours. (Tr. at 71.) She also testified that she was still in the process of returning some intellectual and personal property items to Appellant and that some of the items were in her attorney's office and others were in Appellant's office space. (Tr. at 69-70.)

At the conclusion of the hearing, the hearing officer took the matter under advisement. (Tr. at 74.) The hearing officer issued a decision on February 23, 2011, awarding $14, 637.89 to Ms. Lewis-Cullinan in previously unpaid vacation time pursuant to ยง 28-14-19 and instructed Appellant to pay $3659.47 (a 25% penalty) to the DLT. ...


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